"However as build progressed and after stair placed they said it's too small to have a pull out cupboard."

I'd leave it and pay for something custom afterwards.

We had a couple of ideas which the builder said were not possible. Later we learned that 'not possible' sometimes means ' doesn't come in easy to install standard sizes' and 'not profitable enough'. For us now that would mean ripping out adjoining things and redoing rather a lot. So if you can leave that gap as simple as possible then someone with a can do attitude should be able to do something with it later. And you can never have too much storage.

Leave it empty. Some clear space is good for the mind and the staircase looks like it’s shaping up to be a feature.

Are you going to do anything under the stairs ? Theres quite a bit of space there , its out of view , and you could possibly even find a suitable cupboard or drawers or similar ( new or used ) that fits and suits your style .

The 'gap' could get 3 or 4 potplants , different varieties but also ascending heights . I realise the idea is to make a feature of the stairs , but just an observation -- instead of that gap , if the powder room had been made that bit wider , and you had no gap , that wall would have been twice as easy to build , but also it would have saved having railings and safety features on one side of the stairs , and probably have looked similar and as tidy .

Agree with bigreader, keeping it empty will highlight your staircase, you could always add a feature floor light, wall lights, a gorgeous artwork or a vertical slat wall that is very popular and stylish, keeping it simple will make a feature of your staircase.

I agree with Macyjean about the builder not wanting to do it, rather than it can't be done. However "save it until later" solutions often never get done and you do need a balustrade or something to make the stair compliant.

I would look at removing the existing wall and rebuilding it abutting the stair. Put the extra space into the powder room which will feel much more spacious. Space is the ultimate luxury.

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Best of luck

Dr Retro of Dr Retro House Calls and Dr Retro Virtual Visits via Zoom

Really appreciate all the suggestions especially making it a feature. The timber slats sounds nice too...

The space under stairs will be used as storage.

If we had been told the space couldn't be used we would have made the powder vanity deeper..

The builder is ready to accommodate any suggestions or design ideas which doesn't involve ripping that wall apart.

My first thought when seeing the part floorplan is a per Dr Retro, the wall should be moved out to the side of the stairs the vanity remains the same depth as by moving the wall will create a better niche for the vanity. You are not resizing the vanity just moving it

Find a 40cm deep bookcase and slide it in so you can access books or other items from the staircase.

Pull out cupboard or wine rack/ pull out coat cupboard?

I’m confused. The plan shows a wall on that side of stair but it has not been constructed. How is it to be finished. With railing or full height wall?

I like the idea of plants and feature lighting, however if you are keen to stick to your original idea of a pull out storage cupboard there are options available that will fit this space. Have a look at vauth sagel 300mm tall larder - this is available in Australia via Furnware group and is listed under kitchen solutions - kitchen/home storage.

You can get the pull out units for widths as small as 300. Maybe show the builder some options https://www.renovatorstore.com.au/galley-pull-out-pantry.html

I agree - go for storage